Today's New York Times contained an article concerning the increase in the cost of wholesale products. According to the piece:
This got me thinking about whether the same held true for wholesale SIP termination costs in the VoIP industry. Although the raw materials for VoIP are not directly linked to the skyrocketing cost of food or energy, other costs of doing business (such as the ability to borrow money) are increasing. Are those costs reflected in the rates charged by carriers for PSTN termination?
Lacking industry statistics, I decided to take a look into my backyard for some useful data points. In particular, I looked at the published rates charged by wholesale VoIP termination provider grnVoIP. I happen to know that these rates are based on an an average cost calculation using the wholesale rates of about ten major telco providers. If the rates charged by the ten providers in the grnVoIP basket increased, then those increases would be reflected in the published grnVoIP rates (while all of the rates in the index are quoted in US dollars, four of the carriers are non-US based, making the sample relatively global).
Taking the sum of individual rates in the grnVoIP A-Z rate deck for the month of July 2007, divided by the total number of destinations, I arrived at an average rate of $0.15845. Using the same calculation for the July 2008 rates, I got $0.15648. Using sophisticated reverse regression analysis, two rolls of duct tape, and the shoelaces from an old pair of desert boots, I then calculated that the average rate from July 2007 to July 2008 has actually decreased by approximately 1 percent.
So, by this metric at least, it appears that global inflationary trends have not affected the VoIP industry... yet.
Note: In the interest of full disclosure, grnVoIP (a provider of pay-as-you-go wholesale SIP termination) is a customer of my company Solegy, and I am a member of their advisory board.
Prices for goods purchased by American businesses surged more than expected in July and have jumped by nearly 10 percent over the last year -- the sharpest increase since 1981.
This got me thinking about whether the same held true for wholesale SIP termination costs in the VoIP industry. Although the raw materials for VoIP are not directly linked to the skyrocketing cost of food or energy, other costs of doing business (such as the ability to borrow money) are increasing. Are those costs reflected in the rates charged by carriers for PSTN termination?
Lacking industry statistics, I decided to take a look into my backyard for some useful data points. In particular, I looked at the published rates charged by wholesale VoIP termination provider grnVoIP. I happen to know that these rates are based on an an average cost calculation using the wholesale rates of about ten major telco providers. If the rates charged by the ten providers in the grnVoIP basket increased, then those increases would be reflected in the published grnVoIP rates (while all of the rates in the index are quoted in US dollars, four of the carriers are non-US based, making the sample relatively global).
Taking the sum of individual rates in the grnVoIP A-Z rate deck for the month of July 2007, divided by the total number of destinations, I arrived at an average rate of $0.15845. Using the same calculation for the July 2008 rates, I got $0.15648. Using sophisticated reverse regression analysis, two rolls of duct tape, and the shoelaces from an old pair of desert boots, I then calculated that the average rate from July 2007 to July 2008 has actually decreased by approximately 1 percent.
So, by this metric at least, it appears that global inflationary trends have not affected the VoIP industry... yet.
Note: In the interest of full disclosure, grnVoIP (a provider of pay-as-you-go wholesale SIP termination) is a customer of my company Solegy, and I am a member of their advisory board.
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